Feds approve NY's $8 billion Medicaid waiver

The federal government has approved a plan that will allow New York to keep up to $8 billion in Medicaid savings, according to Gov. Andrew Cuomo's office.

Cuomo announced the final approval of the Medicaid 1115 waiver on Monday after the state and the U.S. Department of Health and Human Services came to a preliminary deal in February.

New York had first applied for the funding in 2012 after the state Medicaid Redesign Team implemented a series of reforms to the health care program, which is estimated to save the federal government $17.1 billion over five years.

Under the waiver, the state will now be able to keep $8 billion of the federal savings and reinvest it in its health care network. Cuomo's administration had initially sought $10 billion.

"We will finally be able use the billions in savings we generated by reforming the state's Medicaid system to protect and improve health care services for millions of New Yorkers," Cuomo said in a statement.

A spokeswoman for the Department of Health and Human Services could not immediately be reached for comment. confirmed the agreement has been finalized.

“Today’s formal agreement with New York represents a significant commitment to improve care delivery in Medicaid that will result in better health outcomes for New Yorkers, improved efficiency, and lower health care costs for the program," the federal agency wrote in a statement. "Under this plan, New York is committing to improve primary care, reduce avoidable hospitalizations and improve health for beneficiaries, all in ways that will support the sustainability of the Medicaid program.”